The main securities regulator in China is planning to bar some technology firms in the country from listing on public markets overseas, sources told The Wall Street Journal in a report on Friday (Aug. 27).
The China Securities Regulatory Commission (CSRC) reportedly asked firms that collect a high volume of sensitive information to put plans for initial public offerings (IPOs) in the U.S. and other countries on the back burner, the sources said.
The proposed regulations are still undergoing final review and the CSRC anticipates being able to implement the new laws near the fourth quarter, and until then, asked some firms to sit tight, the sources said.
Related: Parade Of Chinese US IPOs Turns Into A Deluge Of Delays
The officials reportedly said firms that don’t collect sensitive data, such as pharmaceutical companies, will probably be green-lighted by regulators to move forward with public listings abroad, according to the sources.
China is in the midst of hammering out a set of new mandates that would essentially prohibit firms that collect and store reams of data from filing for U.S. IPOs, sources told the news outlet. The country is also developing a cross-ministry council that would be tasked with granting official approval for public listings in foreign markets, the sources said.
See also: Chinese Watchdogs Tighten Tech Grip With New SAMR Rules
The upcoming rules and the changing regulatory climate surrounding technology companies in China have caused a number of Chinese tech giants to pull planned IPOs in the U.S. TikTok owner ByteDance pulled its U.S. listing plans last month, as did podcast platform Ximalaya, medical data firm LinkDoc Technology and digital fitness platform Keep. In addition, at least five Chinese companies pulled IPO plans in China in the past few months.
Other Chinese firms like the truck-hailing app Full Truck Alliance and online recruiter Boss Zhipin have plans in the works for New York IPOs and are now being subjected to deepening scrutiny by regulators.
Read more: Chinese Startups LinkDoc And Keep Suspend US IPO Plans
Ridehail platform Didi went public on June 30 on the New York Stock Exchange and days later was subjected to intense scrutiny and an onsite cybersecurity review by seven Chinese regulatory agencies.
Didi’s $4.4 billion IPO debuted as the biggest stock sale by a Chinese company since Alibaba’s 2014 listing. Rumors circulated that Didi was planning to delist and go private but the company released a statement stating that was false.
Learn more: Didi Says Reports Of NYSE Delisting Untrue
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